1ST LEAD: Fraught negotiations over new Hungarian prime minister
Budapest - Hungary's Socialist Party leadership met Friday to discuss the possibility of backing former finance minister Lajos Bokros as the leader of an interim government.
The meeting was called after the liberal Free Democrat party rejected Hungarian Prime Minister Ferenc Gyurcsany's nomination of Electrolux Hungary boss Janos Takacs as his replacement, the daily newspaper Nepszabadsag reported.
On leaving a closed meeting with Gyurcsany's Socialist Party earlier on Friday, liberal leader Gabor Fodor said that only banker Gyorgy Suranyi, economist Laszlo Bekesi and former finance minister Lajos Bokros were acceptable to his party.
The governing socialists are a few seats short of a majority, and need support from the 19-strong Free Democrat caucus for Gyurcsany's plan to appoint a new prime minister and avoid early elections.
The prime minister made the shock announcement that he was ready to stand down at a party conference on Saturday, acknowledging that his lack of support had made him an "obstacle" to essential reforms.
Suranyi, a former finance minister and regional head of Italian banking group Intesa SanPaolo, turned the job down on Thursday after failing to secure all-party support.
Bekesi also refused to accept his nomination, saying on Thursday that "no serious man" would take on the job of leading a Hungarian crisis government.
This leaves only Bokros, who was roundly rejected by the Socialist party immediately after Gyurcsany's announcement on Saturday.
As finance minister in the 1994-98 Socialist government, Bokros' draconian austerity package is credited with hauling Hungary out of a previous financial crisis.
He has already indicated that he would accept the job of prime minister if it is offered.
However, he is not popular with the rank and file of the Socialist Party, who are wary of his deep unpopularity with voters.
"Bokros is hard, cruel, and does not understand people; he is a neutron bomb. The infrastructure stays, the people perish," the Socialist backbencher Jozsef Karsai told Hungarian news website Index.
The centre-right opposition party Fidesz says early elections are the only democratic solution to Hungary's political and economic crisis, and flatly refuses to cooperate in setting up an interim crisis government.
Fidesz has held a commanding lead in opinion polls though over two years of economic crisis in Hungary and few Hungarians, regardless of political allegiance, doubt the party will win the next general election. (dpa)